Stability Of Dairy Produce Prices Doubted

Chronicle (Levin), 7 August 1948, Page 5

Stability Of Dairy Produce Prices Doubted

• Press Association)

(Per

WELLINGTON, August 6. Doub't whether the recently signed produce agreements with Britain would ensure the stability that was promiS'eo was expresged at a meeting oLthe Wellington Chh/niber of)Conimerceyst.ates asnpplied report. - - "Tliese contracts were probably the bcst we eould get, " said one speaker, ' ' but we don 't want to let them lul'i us into a sense of false security." Alr. Frank Wilson said that world prices for butter and clieese were at an exceedinglv high level and future trends, he suggested, would be down ward in sympathy with wheat prices. Con -iequentlv, the opening 194S-49 basic piices in the contraet were of vita; importance, as on a steadilv declining market 'the initial hgure • of 235s foi butter and 133s for cheese eould be reduced annually by 74 per cent. to approximately 147s 3d and S3s Gd re spectively in 1954 and 1955, representing an average annual price for the seven-year period of approximately 188s 3d. per hundredweight for butter and lOGs (5d for cheese. "Was it intended that the present snbstnntial discount -011 New Zealand butter as eompared with world parity would be maintained during the period of steady recession in the Dominion 's butter prices?" he asked.. "For example, on an assumed and eonservativd opening world parity price of 320s eompared with the New Zealand con traet price of 235s f.o.b. values caleu lated 011 a 74 per cent. reduetion would, at -the end of our 1954-55 season, reduce world parity to approximately 200s and New Zealand to 147s "3d, giving an average annual return of approximately 25Gs 3d and 188s 3d respeetively.; Fi-om this it will be seen that-price stabilftj is far from assured as, on a receding market, butter and cheese prices eould. during the final season, be discdunted by approximately 374 per cent. It would 'be..more ^orrect to regard tlu agreement as determining the minimum price payable in the event of a serious slump in world prices duriiig the next seven years," Mr. Wilson eoneluded.